Comparing Postal Realty Trust (NYSE:PSTL) and Diversified Healthcare Trust (NASDAQ:DHC)

Diversified Healthcare Trust (NASDAQ:DHC) and Postal Realty Trust (NYSE:PSTL) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Diversified Healthcare Trust and Postal Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	1	1	0	2.00
Postal Realty Trust	0	1	2	0	2.67

Diversified Healthcare Trust presently has a consensus price target of $5.25, indicating a potential upside of 10.06%. Postal Realty Trust has a consensus price target of $17.38, indicating a potential upside of 15.10%. Given Postal Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Postal Realty Trust is more favorable than Diversified Healthcare Trust.

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. Postal Realty Trust pays an annual dividend of $0.97 per share and has a dividend yield of 6.4%. Diversified Healthcare Trust pays out -2.7% of its earnings in the form of a dividend. Postal Realty Trust pays out 202.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Postal Realty Trust has raised its dividend for 3 consecutive years. Postal Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Diversified Healthcare Trust and Postal Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.50 billion	0.77	-$370.26 million	($1.46)	-3.27
Postal Realty Trust	$76.37 million	5.15	$6.60 million	$0.48	31.45

Postal Realty Trust has lower revenue, but higher earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Postal Realty Trust, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Diversified Healthcare Trust has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500. Comparatively, Postal Realty Trust has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Institutional & Insider Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 57.9% of Postal Realty Trust shares are owned by institutional investors. 10.1% of Diversified Healthcare Trust shares are owned by company insiders. Comparatively, 13.2% of Postal Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Diversified Healthcare Trust and Postal Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-22.90%	-18.90%	-7.20%
Postal Realty Trust	15.36%	4.29%	2.06%

Summary

Postal Realty Trust beats Diversified Healthcare Trust on 13 of the 17 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior square feet.